Politicians never have the timing right, and they always overreact.
Many different levels of governments start panicking over a heated real estate market and bringing in various rules to cool the market.
How do you learn to cut through the ever-churning government missteps?
Lessons for the Just Right Timing; Look for Clues
The Just Right Characteristics of an Investment Real Estate Marketplace:
Some people will tell you to wait for a couple of other economic indicators before you jump in such as population growth and increased rental demand but for me, the financial wave has already started, and the momentum is in your favour.
Signs of Momentum
You should be asking what are the signs of GDP Growth and Job Growth are? When do your realize GDP Growth and Job Growth are here for an extended period? What is the right length of time? If you recognize these signs, you can ride the wave to investment real estate success and other investment vehicles.
Gross Domestic Product Growth Signs of Growth (According to Investopedia)
Measuring GDP is complicated (which is why we leave it to the economists), but at its most basic, the calculation can be done in one of two ways: either by adding up what everyone earned in a year (income approach) or by adding up what everyone spent (expenditure method). Logically, both measures should arrive at roughly the same total.
The income approach, which referred to as GDP (I), is calculated by adding up total compensation to employees, gross profits for incorporated and non-incorporated firms, and taxes less any subsidies. The expenditure method is the more common approach and calculated by adding total consumption, investment, government spending, and net exports.
Read more: What is GDP and why is it so important?
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If you go to Investopedia; to the link above you will notice the advertising banners on their website; are for Investment Brokers or Investment Traders. What products are they pushing? You are right if you said stocks or the stock market.
Stocks and the Stock Market rely heavily on GDP growth and their success. Should GDP take a downward trend than stock values suffer, and so does the stock exchange.
I have indicated in previous correspondence that through your government-backed retirement program, your 401Ks, RRSPs, company pensions or other group supported savings programs these savings vehicles are all heavily waited in stocks or a derivative of the stock market. If you want balance in your portfolio; these investments are enough, you don’t need more.
Go back over the years to the 1990s in North America, and you will see other than 2008 and 2009 we have had growth in real GDP.
Let’s discuss the second component I have talked about, and that is job growth. The real key to unlocking success with investment real estate.
What is the definition of a job?
It is a regular compensated position, a piece of work or something done for private advantage.
What is the definition of growth?
According to the Merriam-Webster Dictionary, it is the anticipated growth especially in capital value and income.
Both North American governments are always updating their job growth numbers.
Here is the real magic behind job growth numbers; they full-time and are you seeing an increase in the weekly wages; watch for those trends, and then you can get ready to purchase investment real estate.
In the United States we see a return to not only higher job growth numbers but for the first time since 2001 an increase in real earnings.
There are many markets in every part of your country and world. Hot, cold, just right; there is a market that will work for you.
Remember the national number is only the start to where you decide on investment; drill it down to a particular market; you will find that all this information is available on a state, provincial and municipal level. (First, a telltale sign of weak political thinking; basing a decision for the whole country on one or two markets)
Everything goes in cycles if you can get in at the bottom or close to the lower part of the cycle; you can get decent prices, you can make money at the current rents and know in the not too distance future you can get increased rents.
Wherever you live don’t stay focused on your backyard; look to areas that you not only see job growth and real wage increases; look at GDP growth and take advantage of these indicators; don’t wait for more favourable signs; by that time the herd will be stampeding higher profits underfoot.
We will talk in the months and years ahead of how to manage your good luck and good fortune. Luck and chance come to those own create their path.
What is the real challenge here for you to create and manage investment real estate good luck and fortune?